Baker Hughes Company Announces Third Quarter 2021 Results
- Orders of
$5.4 billion for the quarter, up 6% sequentially and up 5% year-over-year. - Revenue of
$5.1 billion for the quarter, down 1% sequentially and up 1% year-over-year. - GAAP operating income of
$378 million for the quarter, up 95% sequentially and favorable year-over-year. - Adjusted operating income (a non-GAAP measure) of
$402 million for the quarter was up 21% sequentially and up 72% year-over-year. - Adjusted EBITDA* (a non-GAAP measure) of
$664 million for the quarter was up 9% sequentially and up 21% year-over-year. - GAAP earnings per share of
$0.01 for the quarter which included$0.15 per share of adjusting items. Adjusted earnings per share (a non-GAAP measure) was$0.16 . - Cash flows generated from operating activities were
$416 million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was$305 million .
The Company presents its financial results in accordance with GAAP. However, management believes that using additional non-GAAP measures will enhance the evaluation of the profitability of the Company and its ongoing operations. Please see reconciliations in the section entitled "Reconciliation of GAAP to non-GAAP Financial Measures." Certain columns and rows in our tables and financial statements may not sum up due to the use of rounded numbers.
*Adjusted EBITDA (a non-GAAP measure) is defined as operating income (loss) excluding depreciation & amortization and operating income adjustments.
|
|
Three Months Ended |
Variance |
|||||||||||
|
(in millions except per share amounts) |
|
|
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
5,378 |
|
$ |
5,093 |
|
$ |
5,106 |
|
6 |
% |
5 |
% |
|
Revenue |
5,093 |
|
5,142 |
|
5,049 |
|
(1 |
)% |
1 |
% |
|||
|
Operating income (loss) |
378 |
|
194 |
|
(49 |
) |
95 |
% |
F |
||||
|
Adjusted operating income (non-GAAP) |
402 |
|
333 |
|
234 |
|
21 |
% |
72 |
% |
|||
|
Adjusted EBITDA (non-GAAP) |
664 |
|
611 |
|
549 |
|
9 |
% |
21 |
% |
|||
|
Net income (loss) attributable to Baker Hughes |
8 |
|
(68 |
) |
(170 |
) |
F |
F |
|||||
|
Adjusted net income (non-GAAP) attributable to Baker Hughes |
141 |
|
83 |
|
27 |
|
70 |
% |
F |
||||
|
EPS attributable to Class A shareholders |
0.01 |
|
(0.08 |
) |
(0.25 |
) |
F |
F |
|||||
|
Adjusted EPS (non-GAAP) attributable to Class A shareholders |
0.16 |
|
0.10 |
|
0.04 |
|
59 |
% |
F |
||||
|
Cash flow from operating activities |
416 |
|
506 |
|
219 |
|
(18 |
)% |
90 |
% |
|||
|
Free cash flow (non-GAAP) |
305 |
|
385 |
|
52 |
|
(21 |
)% |
F |
||||
|
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%. |
“We are pleased with the way the team has continued to execute on our strategy over the course of the third quarter. At the total company level, we had a strong orders quarter, grew adjusted EBITDA and adjusted Operating Income margin rate sequentially and year-over-year, and we had another solid quarter of free cash flow. We did experience some mixed results across our segments during the quarter. TPS and OFE delivered solid orders, and TPS also delivered solid operating income and margin rates. OFS was negatively impacted by Hurricane Ida, cost inflation in our chemicals business, and delivery issues stemming from supply chain constraints, while DS also faced supply chain issues that impacted product deliveries. Despite these challenges, I want to thank our employees and partners for their continued hard work and commitment to safety,” said
“As we look ahead to the rest of 2021 and into 2022, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas. However, the pace of growth is being hampered by the
“We remain committed to evolving our company with the energy and industrial markets while continuing to prioritize higher margins, returning capital to our shareholders, and free cash flow. We look forward to supporting our customers, advancing our strategic priorities, and delivering for our shareholders,” concluded Simonelli.
Quarter Highlights
Supporting our Customers
The OFS segment secured several key contracts for Integrated Well Services (IWS). OFS secured an IWS contract for a new gas production startup project in
OFS’s Completions and Well Intervention, Drilling Services, Drill Bit, and Drilling and Completion Fluids product lines continued to expand their presence in
The OFE segment continued to support customers with subsea projects in multiple regions. In
The TPS segment continued to see growth in the offshore segment, securing several contracts to supply turbomachinery equipment for FPSO projects. In
TPS also secured multiple contracts to supply its innovative and flexible NovaLT16 gas turbine technology for industrial applications. In
The DS segment continued to secure key contacts in multiple segments, including downstream oil and gas, renewable energy, pulp and paper, and transportation. The Panametrics product line secured a key contract with a major Mexican oil & gas operator for PanaFlow flowmeters and flare management solutions to be used in a refinery.
In
The Nexus Controls product line secured a contract to upgrade two pumped-storage hydroelectric power generation facilities in
The Druck and Waygate Technologies product lines secured several strategic contracts in the aerospace and transportation segments. Druck continued to see growth in its pressure measurement technologies in the recovering aerospace segment, securing contracts in
Waygate Technologies secured a large contract with
Executing on Priorities
During the third quarter, Baker Hughes announced a
On
OFE also advanced its non-metallic composite pipe applications, signing a memorandum of understanding (MOU) with Primus Line to drive non-metallic pipeline growth in the pipeline integrity management market. The collaboration aims to rehabilitate and repurpose existing pressure pipelines, offering Baker Hughes’ scale and extensive non-metallics portfolio alongside Primus Line’s domain expertise and existing customer base in trenchless pipeline rehabilitation. The collaboration will also aim to jointly offer non-metallic solutions to repurpose existing pipeline networks for hydrogen and carbon dioxide (CO2) transportation.
AkerBP awarded a contract to TPS for the upgrade of the turbogenerator train systems at the Alveheim FPSO in
TPS secured an award for the upgrade of control systems on rotating equipment for two different customers in
TPS also saw continued customer interest in carbon capture, utilization and storage (CCUS) and hydrogen applications. TPS was selected to supply booster and export centrifugal pumps to the Northern Lights CO2 transport and storage project in
OFS continued to advance customer collaborations in CCUS and geothermal by leveraging its subsurface domain expertise. In
In geothermal, OFS delivered a significant technical and economic feasibility study in conjunction with the
OFS continued to transform oilfield operations by making digital and automated improvements, enabling customers to increase production and reduce emissions.
DS continued growth in industrial asset management wins across in multiple end-markets and drove digital transformation for customers. In the
Leading with Innovation
The BakerHughesC3.ai alliance (BHC3) announced that Canadian customer MEG Energy successfully deployed the AI-based BHC3 Production Optimization application to improve operational efficiency, productivity, and better visualize risk across the company’s upstream production operations. MEG Energy is using BHC3 Production Optimization to monitor moment-to-moment operations, allowing seamless integration between engineers and field staff. The application creates actionable predictive insights to improve the efficiency of MEG’s steam-assisted gravity drainage (SAGD) production, with a system of virtual alerts and meters are providing measurements for emulsion, gas, and vapor across more than 300 thermal production wells.
OFS introduced the i-Trak™ automated reservoir navigation service (RNS), a first-of-its-kind offering that lets Baker Hughes engineers steer the bottomhole assembly to the most productive sections of a reservoir more consistently, faster and with fewer resources. The service uses reservoir models, reservoir mapping systems, real-time formation evaluation data, proprietary algorithms, and continuous steerable drilling systems to automate the process. I-Trak is already proven in the field, with an extra 100,000 barrels added to a customer's reserves in one recent well. It has already been used on more than 25 extended reach and multilateral wells to navigate more than 150,000 feet (45000 meters) of reservoir.
Waygate Technologies launched several new industrial inspection solutions to improve accuracy, digital connectivity and ergonomics for customers, including the new Krautkramer USM 100 handheld UT device and the Everest Mentor Flex VideoProbe. In addition, Waygate launched its latest InspectionWorks Analyze software for advanced automatic defect recognition (ADR) capabilities, helping customers to automatically detect defects, classify them and simply decision-making. These technologies are applicable to multiple industrial end-markets and already have significant customer adoption in the aerospace, automotive, electronics, rotating equipment, and power markets.
Consolidated Results by Reporting Segment
Consolidated Orders by Reporting Segment
|
(in millions) |
Three Months Ended |
|
Variance |
||||||||||
|
Consolidated segment orders |
|
|
|
|
Sequential |
Year-over- |
|||||||
|
Oilfield Services |
$ |
2,412 |
$ |
2,359 |
$ |
2,296 |
|
2 |
% |
5 |
% |
||
|
Oilfield Equipment |
724 |
681 |
432 |
|
6 |
% |
68 |
% |
|||||
|
Turbomachinery & Process Solutions |
1,719 |
1,513 |
1,885 |
|
14 |
% |
(9 |
)% |
|||||
|
Digital Solutions |
523 |
540 |
493 |
|
(3 |
)% |
6 |
% |
|||||
|
Total |
$ |
5,378 |
$ |
5,093 |
$ |
5,106 |
|
6 |
% |
5 |
% |
||
Orders for the quarter were
Year-over-year, the increase in orders was a result of higher order intake in Oilfield Equipment, Oilfield Services, and Digital Solutions, partially offset by a decline in Turbomachinery & Process Solutions. Year-over-year equipment orders were down 7% and service orders were up 18%.
The Company's total book-to-bill ratio in the quarter was 1.1; the equipment book-to-bill ratio in the quarter was 1.1.
Remaining Performance Obligations (RPO) in the third quarter ended at
Consolidated Revenue by Reporting Segment
|
(in millions) |
Three Months Ended |
|
Variance |
||||||||||
|
Consolidated segment revenue |
|
|
|
|
Sequential |
Year-over- |
|||||||
|
Oilfield Services |
$ |
2,419 |
$ |
2,358 |
$ |
2,308 |
|
3 |
% |
5 |
% |
||
|
Oilfield Equipment |
603 |
637 |
726 |
|
(5 |
)% |
(17 |
)% |
|||||
|
Turbomachinery & Process Solutions |
1,562 |
1,628 |
1,513 |
|
(4 |
)% |
3 |
% |
|||||
|
Digital Solutions |
510 |
520 |
503 |
|
(2 |
)% |
1 |
% |
|||||
|
Total |
$ |
5,093 |
$ |
5,142 |
$ |
5,049 |
|
(1 |
)% |
1 |
% |
||
Revenue for the quarter was
Compared to the same quarter last year, revenue was up 1%, driven by higher volume in Oilfield Services, Turbomachinery & Process Solutions, and Digital Solutions segments, partially offset by Oilfield Equipment.
Consolidated Operating Income by Reporting Segment
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Segment operating income |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Oilfield Services |
$ |
190 |
|
$ |
171 |
|
$ |
93 |
|
|
11 |
% |
F |
|
|
Oilfield Equipment |
14 |
|
28 |
|
19 |
|
|
(50 |
)% |
(27 |
)% |
|||
|
Turbomachinery & Process Solutions |
278 |
|
220 |
|
191 |
|
|
27 |
% |
46 |
% |
|||
|
Digital Solutions |
26 |
|
25 |
|
46 |
|
|
3 |
% |
(44 |
)% |
|||
|
Total segment operating income |
508 |
|
444 |
|
349 |
|
|
14 |
% |
46 |
% |
|||
|
Corporate |
(105 |
) |
(111 |
) |
(115 |
) |
|
5 |
% |
8 |
% |
|||
|
Inventory impairment |
— |
|
— |
|
(42 |
) |
|
— |
% |
F |
||||
|
Restructuring, impairment & other |
(14 |
) |
(125 |
) |
(209 |
) |
|
89 |
% |
93 |
% |
|||
|
Separation related |
(11 |
) |
(15 |
) |
(32 |
) |
|
29 |
% |
67 |
% |
|||
|
Operating income (loss) |
378 |
|
194 |
|
(49 |
) |
|
95 |
% |
F |
||||
|
Adjusted operating income* |
402 |
|
333 |
|
234 |
|
|
21 |
% |
72 |
% |
|||
|
Depreciation & amortization |
262 |
|
278 |
|
315 |
|
|
(6 |
)% |
(17 |
)% |
|||
|
Adjusted EBITDA* |
$ |
664 |
|
$ |
611 |
|
$ |
549 |
|
|
9 |
% |
21 |
% |
|
*Non-GAAP measure. |
|
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%. |
On a GAAP basis, operating income for the third quarter of 2021 was
Adjusted operating income (a non-GAAP measure) for the third quarter of 2021 was
Depreciation and amortization for the third quarter of 2021 was
Adjusted EBITDA (a non-GAAP measure) for the third quarter of 2021 was
Corporate costs were
Other Financial Items
Income tax expense in the third quarter of 2021 was
Other non-operating loss in the third quarter of 2021 was
GAAP diluted earnings per share was
Cash flow from operating activities was
Capital expenditures, net of proceeds from disposal of assets, were
Results by Reporting Segment
The following segment discussions and variance explanations are intended to reflect management's view of the relevant comparisons of financial results on a sequential or year-over-year basis, depending on the business dynamics of the reporting segments.
Oilfield Services
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Oilfield Services |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Revenue |
$ |
2,419 |
|
$ |
2,358 |
|
$ |
2,308 |
|
|
3 |
% |
5 |
% |
|
Operating income |
$ |
190 |
|
$ |
171 |
|
$ |
93 |
|
|
11 |
% |
F |
|
|
Operating income margin |
7.9 |
% |
7.3 |
% |
4.0 |
% |
|
0.6 |
pts |
3.8 |
pts |
|||
|
Depreciation & amortization |
$ |
183 |
|
$ |
195 |
|
$ |
217 |
|
|
(6 |
)% |
(16 |
)% |
|
EBITDA* |
$ |
373 |
|
$ |
366 |
|
$ |
310 |
|
|
2 |
% |
20 |
% |
|
EBITDA margin* |
15.4 |
% |
15.5 |
% |
13.4 |
% |
|
(0.1 |
)pts |
2 |
pts |
|||
Oilfield Services (OFS) revenue of
Segment operating income before tax for the quarter was
Oilfield Equipment
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Oilfield Equipment |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
724 |
|
$ |
681 |
|
$ |
432 |
|
|
6 |
% |
68 |
% |
|
Revenue |
$ |
603 |
|
$ |
637 |
|
$ |
726 |
|
|
(5 |
)% |
(17 |
)% |
|
Operating income (loss) |
$ |
14 |
|
$ |
28 |
|
$ |
19 |
|
|
(50 |
)% |
(27 |
)% |
|
Operating income margin |
2.3 |
% |
4.3 |
% |
2.6 |
% |
|
(2 |
)pts |
(0.3 |
)pts |
|||
|
Depreciation & amortization |
$ |
22 |
|
$ |
26 |
|
$ |
35 |
|
|
(13 |
)% |
(36 |
)% |
|
EBITDA* |
$ |
36 |
|
$ |
53 |
|
$ |
54 |
|
|
(32 |
)% |
(33 |
)% |
|
EBITDA margin* |
6.0 |
% |
8.4 |
% |
7.4 |
% |
(2.4 |
)pts |
(1.4 |
)pts |
||||
Oilfield Equipment (OFE) orders of
|
*Non-GAAP measure. |
OFE revenue of
Segment operating income before tax for the quarter was
Turbomachinery & Process Solutions
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Turbomachinery & Process Solutions |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
1,719 |
|
$ |
1,513 |
|
$ |
1,885 |
|
|
14 |
% |
(9 |
)% |
|
Revenue |
$ |
1,562 |
|
$ |
1,628 |
|
$ |
1,513 |
|
|
(4 |
)% |
3 |
% |
|
Operating income |
$ |
278 |
|
$ |
220 |
|
$ |
191 |
|
|
27 |
% |
46 |
% |
|
Operating income margin |
17.8 |
% |
13.5 |
% |
12.6 |
% |
|
4.3 |
pts |
5.2 |
pts |
|||
|
Depreciation & amortization |
$ |
30 |
|
$ |
30 |
|
$ |
33 |
|
|
(3 |
)% |
(9 |
)% |
|
EBITDA* |
$ |
308 |
|
$ |
250 |
|
$ |
223 |
|
|
23 |
% |
38 |
% |
|
EBITDA margin* |
19.7 |
% |
15.4 |
% |
14.8 |
% |
|
4.3 |
pts |
4.9 |
pts |
|||
Turbomachinery & Process Solutions (TPS) orders of
TPS revenue of
Segment operating income before tax for the quarter was
|
*Non-GAAP measure. |
Digital Solutions
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Digital Solutions |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
523 |
|
$ |
540 |
|
$ |
493 |
|
|
(3 |
)% |
6 |
% |
|
Revenue |
$ |
510 |
|
$ |
520 |
|
$ |
503 |
|
|
(2 |
)% |
1 |
% |
|
Operating income |
$ |
26 |
|
$ |
25 |
|
$ |
46 |
|
|
3 |
% |
(44 |
)% |
|
Operating income margin |
5.1 |
% |
4.8 |
% |
9.2 |
% |
|
0.2 |
pts |
(4.1 |
)pts |
|||
|
Depreciation & amortization |
$ |
22 |
|
$ |
22 |
|
$ |
24 |
|
|
(1 |
)% |
(9 |
)% |
|
EBITDA* |
$ |
48 |
|
$ |
47 |
|
$ |
70 |
|
|
1 |
% |
(32 |
)% |
|
EBITDA margin* |
9.4 |
% |
9.1 |
% |
13.9 |
% |
|
0.3 |
pts |
(4.6 |
)pts |
|||
Digital Solutions (DS) orders of
DS revenue of
Segment operating income before tax for the quarter was
|
*Non-GAAP measure. |
Reconciliation of GAAP to non-GAAP Financial Measures
Management provides non-GAAP financial measures because it believes such measures are widely accepted financial indicators used by investors and analysts to analyze and compare companies on the basis of operating performance and liquidity, and that these measures may be used by investors to make informed investment decisions.
Table 1a. Reconciliation of GAAP and Adjusted Operating Income/(Loss)
|
|
Three Months Ended |
||||||||
|
(in millions) |
|
|
|
||||||
|
Operating income (loss) (GAAP) |
$ |
378 |
$ |
194 |
$ |
(49 |
) |
||
|
Separation related |
11 |
15 |
32 |
|
|||||
|
Restructuring, impairment & other |
14 |
125 |
209 |
|
|||||
|
Inventory impairment |
— |
— |
42 |
|
|||||
|
Total operating income adjustments |
24 |
139 |
283 |
|
|||||
|
Adjusted operating income (non-GAAP) |
$ |
402 |
$ |
333 |
$ |
234 |
|
||
Table 1a reconciles operating income (loss), which is the directly comparable financial result determined in accordance with Generally Accepted Accounting Principles (GAAP), to adjusted operating income (a non-GAAP financial measure). Adjusted operating income excludes the impact of certain identified items.
Table 1b. Reconciliation of Operating Income (Loss) to EBITDA and Adjusted EBITDA
|
|
Three Months Ended |
||||||||
|
(in millions) |
|
|
|
||||||
|
Operating income (loss) (GAAP) |
$ |
378 |
$ |
194 |
$ |
(49 |
) |
||
|
Depreciation & amortization |
262 |
278 |
315 |
|
|||||
|
EBITDA (non-GAAP) |
640 |
472 |
267 |
|
|||||
|
Total operating income adjustments (1) |
24 |
139 |
283 |
|
|||||
|
Adjusted EBITDA (non-GAAP) |
$ |
664 |
$ |
611 |
$ |
549 |
|
||
|
(1) |
See Table 1a for the identified adjustments to operating income. |
Table 1b reconciles operating income (loss), which is the directly comparable financial result determined in accordance with GAAP, to EBITDA (a non-GAAP financial measure). Adjusted EBITDA (a non-GAAP financial measure) excludes the impact of certain identified items.
Table 1c. Reconciliation of Net Income (Loss) Attributable to Baker Hughes to Adjusted Net Income Attributable to Baker Hughes
|
|
Three Months Ended |
||||||||
|
(in millions, except per share amounts) |
|
|
|
||||||
|
Net income (loss) attributable to Baker Hughes (GAAP) |
$ |
8 |
|
$ |
(68 |
) |
$ |
(170 |
) |
|
Total operating income adjustments (1) |
24 |
|
139 |
|
283 |
|
|||
|
Other adjustments (non-operating) (2) |
140 |
|
71 |
|
90 |
|
|||
|
Tax on total adjustments |
(3 |
) |
(19 |
) |
(54 |
) |
|||
|
Total adjustments, net of income tax |
161 |
|
191 |
|
319 |
|
|||
|
Less: adjustments attributable to noncontrolling interests |
28 |
|
40 |
|
122 |
|
|||
|
Adjustments attributable to Baker Hughes |
133 |
|
151 |
|
197 |
|
|||
|
Adjusted net income attributable to Baker Hughes (non-GAAP) |
$ |
141 |
|
$ |
83 |
|
$ |
27 |
|
|
|
|
|
|
||||||
|
|
|
|
|
||||||
|
Denominator: |
|
|
|
||||||
|
Weighted-average shares of Class A common stock outstanding diluted |
857 |
|
811 |
|
678 |
|
|||
|
Adjusted earnings per Class A share - diluted (non-GAAP) |
$ |
0.16 |
|
$ |
0.10 |
|
$ |
0.04 |
|
|
(1) |
See Table 1a for the identified adjustments to operating income. |
|
|
(2) |
3Q'21 primarily due to losses from the net change in fair value of our investment in C3.ai. 2Q'21 primarily due to a non-recurring charge for a loss contingency related to certain tax matters and losses from the net change in fair value of our investment in C3.ai. 3Q'20 primarily driven by a loss on the write-down of assets held for sale partially offset by a tax benefit related to the CARES Act. |
Table 1c reconciles net income (loss) attributable to Baker Hughes, which is the directly comparable financial result determined in accordance with GAAP, to adjusted net income attributable to Baker Hughes (a non-GAAP financial measure). Adjusted net income attributable to Baker Hughes excludes the impact of certain identified items.
Table 1d. Reconciliation of Cash Flow From Operating Activities to Free Cash Flow
|
|
Three Months Ended |
||||||||
|
(in millions) |
|
|
|
||||||
|
Cash flow from operating activities (GAAP) |
$ |
416 |
|
$ |
506 |
|
$ |
219 |
|
|
Add: cash used in capital expenditures, net of proceeds from disposal of assets |
(111 |
) |
(121 |
) |
(167 |
) |
|||
|
Free cash flow (non-GAAP) |
$ |
305 |
|
$ |
385 |
|
$ |
52 |
|
Table 1d reconciles net cash flows from operating activities, which is the directly comparable financial result determined in accordance with GAAP, to free cash flow (a non-GAAP financial measure). Free cash flow is defined as net cash flows from operating activities less expenditures for capital assets plus proceeds from disposal of assets.
Financial Tables (GAAP)
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
|
|
Three Months Ended |
Nine Months Ended |
||||||||||
|
(In millions, except per share amounts) |
2021 |
2020 |
2021 |
2020 |
||||||||
|
Revenue |
$ |
5,093 |
|
$ |
5,049 |
|
$ |
15,017 |
|
$ |
15,210 |
|
|
Costs and expenses: |
|
|
|
|
||||||||
|
Cost of revenue |
4,083 |
|
4,292 |
|
12,173 |
|
13,020 |
|
||||
|
Selling, general and administrative |
607 |
|
565 |
|
1,836 |
|
1,830 |
|
||||
|
|
— |
|
— |
|
— |
|
14,773 |
|
||||
|
Restructuring, impairment and other |
14 |
|
209 |
|
219 |
|
1,637 |
|
||||
|
Separation related |
11 |
|
32 |
|
53 |
|
110 |
|
||||
|
Total costs and expenses |
4,715 |
|
5,098 |
|
14,281 |
|
31,370 |
|
||||
|
Operating income (loss) |
378 |
|
(49 |
) |
736 |
|
(16,160 |
) |
||||
|
Other non-operating loss, net |
(102 |
) |
(149 |
) |
(791 |
) |
(367 |
) |
||||
|
Interest expense, net |
(67 |
) |
(66 |
) |
(205 |
) |
(195 |
) |
||||
|
Income (loss) before income taxes |
209 |
|
(264 |
) |
(260 |
) |
(16,722 |
) |
||||
|
Benefit (provision) for income taxes |
(193 |
) |
(6 |
) |
(406 |
) |
10 |
|
||||
|
Net income (loss) |
16 |
|
(270 |
) |
(666 |
) |
(16,712 |
) |
||||
|
Less: Net income (loss) attributable to noncontrolling interests |
8 |
|
(100 |
) |
(154 |
) |
(6,120 |
) |
||||
|
Net income (loss) attributable to |
$ |
8 |
|
$ |
(170 |
) |
$ |
(512 |
) |
$ |
(10,592 |
) |
|
|
|
|
|
|
||||||||
|
Per share amounts: |
|
|
|
|||||||||
|
Basic and diluted income (loss) per Class A common stock |
$ |
0.01 |
|
$ |
(0.25 |
) |
$ |
(0.64 |
) |
$ |
(16.01 |
) |
|
|
|
|
|
|
||||||||
|
Weighted average shares: |
|
|
|
|
||||||||
|
Class A basic |
851 |
|
676 |
|
799 |
|
662 |
|
||||
|
Class A diluted |
857 |
|
676 |
|
799 |
|
662 |
|
||||
|
|
|
|
|
|
||||||||
|
Cash dividend per Class A common stock |
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.54 |
|
$ |
0.54 |
|
Condensed Consolidated Statements of Financial Position
(Unaudited)
|
(In millions) |
|
|
|||
|
ASSETS |
|||||
|
Current Assets: |
|
|
|||
|
Cash and cash equivalents |
$ |
3,926 |
$ |
4,132 |
|
|
Current receivables, net |
5,326 |
5,622 |
|||
|
Inventories, net |
4,110 |
4,421 |
|||
|
All other current assets |
1,525 |
2,280 |
|||
|
Total current assets |
14,887 |
16,455 |
|||
|
Property, plant and equipment, less accumulated depreciation |
4,982 |
5,358 |
|||
|
|
6,015 |
5,977 |
|||
|
Other intangible assets, net |
4,151 |
4,397 |
|||
|
Contract and other deferred assets |
1,738 |
2,001 |
|||
|
All other assets |
3,999 |
3,819 |
|||
|
Total assets |
$ |
35,772 |
$ |
38,007 |
|
|
LIABILITIES AND EQUITY |
|||||
|
Current Liabilities: |
|
|
|||
|
Accounts payable |
$ |
3,514 |
$ |
3,532 |
|
|
Short-term debt and current portion of long-term debt |
56 |
889 |
|||
|
Progress collections and deferred income |
3,263 |
3,454 |
|||
|
All other current liabilities |
2,521 |
2,352 |
|||
|
Total current liabilities |
9,354 |
10,227 |
|||
|
Long-term debt |
6,708 |
6,744 |
|||
|
Liabilities for pensions and other employee benefits |
1,132 |
1,217 |
|||
|
All other liabilities |
1,542 |
1,577 |
|||
|
Equity |
17,036 |
18,242 |
|||
|
Total liabilities and equity |
$ |
35,772 |
$ |
38,007 |
|
|
|
|
|
|||
|
Outstanding |
|
|
|||
|
Class A common stock |
859 |
724 |
|||
|
Class B common stock |
179 |
311 |
|||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Three Months Ended |
Nine Months Ended |
|||||||
|
(In millions) |
2021 |
2021 |
2020 |
||||||
|
Cash flows from operating activities: |
|
|
|
||||||
|
Net income (loss) |
$ |
16 |
|
$ |
(666 |
) |
$ |
(16,712 |
) |
|
Adjustments to reconcile net loss to net cash flows from operating activities: |
|
|
|
||||||
|
Depreciation and amortization |
262 |
|
832 |
|
1,010 |
|
|||
|
Loss on equity securities |
140 |
|
955 |
|
— |
|
|||
|
Provision (benefit) for deferred income taxes |
74 |
|
24 |
|
(265 |
) |
|||
|
Other asset impairments |
— |
|
21 |
|
1,237 |
|
|||
|
|
— |
|
— |
|
14,773 |
|
|||
|
Loss on sale of business |
— |
|
— |
|
217 |
|
|||
|
Write-down of assets held for sale |
— |
|
— |
|
129 |
|
|||
|
Working capital |
(101 |
) |
470 |
|
255 |
|
|||
|
Other operating items, net |
25 |
|
(36 |
) |
283 |
|
|||
|
Net cash flows from operating activities |
416 |
|
1,600 |
|
927 |
|
|||
|
Cash flows from investing activities: |
|
|
|
||||||
|
Expenditures for capital assets, net of proceeds from disposal of assets |
(111 |
) |
(412 |
) |
(660 |
) |
|||
|
Other investing items, net |
29 |
|
200 |
|
109 |
|
|||
|
Net cash flows from (used in) investing activities |
(82 |
) |
(212 |
) |
(551 |
) |
|||
|
Cash flows from financing activities: |
|
|
|
||||||
|
Net repayments of debt and other borrowings |
(15 |
) |
(60 |
) |
(170 |
) |
|||
|
Proceeds from (repayment of) commercial paper |
— |
|
(832 |
) |
737 |
|
|||
|
Proceeds from issuance of long-term debt |
— |
|
— |
|
500 |
|
|||
|
Dividends paid |
(156 |
) |
(436 |
) |
(359 |
) |
|||
|
Distributions to |
(32 |
) |
(127 |
) |
(199 |
) |
|||
|
Repurchase of Class A common stock |
(106 |
) |
(106 |
) |
— |
|
|||
|
Other financing items, net |
9 |
|
(24 |
) |
(15 |
) |
|||
|
Net cash flows from (used in) financing activities |
(300 |
) |
(1,585 |
) |
494 |
|
|||
|
Effect of currency exchange rate changes on cash and cash equivalents |
(21 |
) |
(9 |
) |
(58 |
) |
|||
|
Increase (decrease) in cash and cash equivalents |
13 |
|
(206 |
) |
812 |
|
|||
|
Cash and cash equivalents, beginning of period |
3,913 |
|
4,132 |
|
3,249 |
|
|||
|
Cash and cash equivalents, end of period |
$ |
3,926 |
|
$ |
3,926 |
|
$ |
4,061 |
|
|
Supplemental cash flows disclosures: |
|
|
|
||||||
|
Income taxes paid, net of refunds |
$ |
133 |
|
$ |
181 |
|
$ |
317 |
|
|
Interest paid |
$ |
47 |
|
$ |
204 |
|
$ |
188 |
|
Supplemental Financial Information
Supplemental financial information can be found on the Company’s website at: investors.bakerhughes.com in the Financial Information section under Quarterly Results.
Conference Call and Webcast
The Company has scheduled an investor conference call to discuss management’s outlook and the results reported in today’s earnings announcement. The call will begin at
Forward-Looking Statements
This news release (and oral statements made regarding the subjects of this release) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (each a “forward-looking statement”). The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “project,” “foresee,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “potential,” “would,” “may,” “probable,” “likely,” and similar expressions, and the negative thereof, are intended to identify forward-looking statements. There are many risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These forward-looking statements are also affected by the risk factors described in the Company’s annual report on Form 10-K for the annual period ended
Our expectations regarding our business outlook and business plans; the business plans of our customers; oil and natural gas market conditions; cost and availability of resources; economic, legal and regulatory conditions, and other matters are only our forecasts regarding these matters.
These forward-looking statements, including forecasts, may be substantially different from actual results, which are affected by many risks, along with the following risk factors and the timing of any of these risk factors:
Restructuring - Our restructuring plans may not be successful and achieve the expected result; continued deterioration of market conditions, whether due to the continued spread of COVID-19 or other events could result in further restructuring costs and impairments.
COVID-19 - The continued spread of the COVID-19 virus and the continuation of the measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns, and the related uncertainties.
GE Separation - The failure to successfully eliminate dependencies on
Economic and political conditions - the impact of worldwide economic conditions; the effect that declines in credit availability may have on worldwide economic growth and demand for hydrocarbons; foreign currency exchange fluctuations and changes in the capital markets in locations where we operate; and the impact of government disruptions and sanctions.
Orders and RPO - our ability to execute on orders and RPO in accordance with agreed specifications, terms and conditions and convert those orders and RPO to revenue and cash.
Oil and gas market conditions - the level of petroleum industry exploration, development and production expenditures; the price of, volatility in pricing of, and the demand for crude oil and natural gas; drilling activity; drilling permits for and regulation of the shelf and the deepwater drilling; excess productive capacity; crude and product inventories; liquefied natural gas supply and demand; seasonal and other adverse weather conditions that affect the demand for energy; severe weather conditions, such as tornadoes and hurricanes, that affect exploration and production activities;
Terrorism and geopolitical risks - war, military action, terrorist activities or extended periods of international conflict, particularly involving any petroleum-producing or -consuming regions; labor disruptions, civil unrest or security conditions where we operate; potentially burdensome taxation, expropriation of assets by governmental action; cybersecurity risks and cyber incidents or attacks; epidemic outbreaks.
About Baker Hughes:
View source version on businesswire.com: https://www.businesswire.com/news/home/20211020005176/en/
Investor Relations
+1 281-809-9088
investor.relations@bakerhughes.com
Media Relations
+1 713-879-2862
thomas.millas@bakerhughes.com
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